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Onto Innovation is looking like a smart investment play in 2026 thanks in part to its potential to capitalize on growth in advanced packaging and semiconductor metrology.
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Advanced packaging is viewed as a major innovation driver across CPUs, memory, and optics, with high barriers to entry favoring early leaders.
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Renewed capital spending confidence from major chip manufacturers and hyperscaler commitments is improving the outlook for semiconductor equipment stocks.
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During a recent episode of The AI Investor Podcast, co-host Eric Bleeker cited Onto Innovation as a smart investment play in 2026. Onto is an American semiconductor company which was formed in 2019, and has recently began getting more attention from investors after a period of strong multi year total returns.
Bleeker discussed adding the stock to his portfolio thanks in part to the company’s potential to capitalize on growth in advanced packaging and semiconductor metrology. He sees advanced packaging as a major innovation driver across CPUs, memory, and optics, with high barriers to entry favoring early leaders.
“In early 2025 it looked like a lot of the manufacturers, the Taiwan Semiconductors, the Intels, the Samsungs, the companies making memory, were going to be more conservative,” Bleeker explains. “But as we enter 2026, we’re seeing now more confidence from these companies, more ordering because a lot of the hyperscalers are giving more guarantees.”
Bleeker also points out that because the field is technically complex and costly to execute, companies with early advantages are positioned to maintain competitive strength.
Onto recently announced that members of its team will be participating in a number of upcoming investor events, including the Morgan Stanley 2026 Technology, Media & Telecom Conference on March 3 and the Cantor 2026 Global Technology & Industrial Growth Conference on March 11.
So let’s start with Onto Innovation (NYSE: ONTO). We’re going to add $10,000 into this name. Some listeners may recognize it because I discussed potentially adding it last year as a play on the memory cycle. I ended up going with Camtek (NASDAQ: CAMT) instead, which I thought was the superior move, but at this point I’m ready to own both stocks in the portfolio.
The big theme we’re interested in is advanced packaging. As we’ve discussed before, much of the innovation we’re going to see in the coming years across CPUs, memory, and optics will come from how chips are packaged. This is an area of incredible growth. Advanced packaging, like most things in semiconductors, is extremely difficult. Mistakes are expensive, and companies that get an early lead tend to maintain a strong advantage. That’s why we’re focused here.
A lot of capital is flowing into metrology, which involves inspecting the output of advanced packaging. It’s an area with substantial growth potential, and that’s where Onto Innovation operates. As I noted, we previously recommended Camtek. Onto had a terrible 2025, and in many ways it was fortunate we missed it at the time, even though Camtek itself experienced a significant drawdown before becoming a strong performer in the portfolio.
Looking at earnings, Onto had $5.52 in earnings in 2022. By last year, that number had declined to $4.94, representing negative growth over that period. Expectations now call for approximately $6.52 in earnings this year. The reason is that last year, within the semiconductor equipment space, many manufacturers were cautious. Companies like Taiwan Semiconductor (NYSE: TSM), Intel (NASDAQ: INTC), and Samsung along with other memory producers, were concerned that aggressive spending would lead to overcapacity and eventual pullbacks.
That caution weighed on semiconductor equipment stocks, which underperformed the broader market. However, as we move into 2026, we’re seeing renewed confidence. Manufacturers are increasing orders because hyperscalers are providing stronger guarantees that spending will continue through 2026 and into 2027. With that visibility, these companies feel more comfortable investing.
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